All Forum Posts by: John Suralik

Brandon Kelly Good luck meeting your goals Brandon. I'm looking at few quads and contacting owners to keep me in mind if they want to sell. I live in Morehead City, so if you ever need boots on the ground here, or I can help in any other way feel free to message me.

Mike Hanneman Thanks for the feedback. Extra room and land are definitely something I'm going to be looking for. I'm going to meet with every local bank in the area and see if any of them will work with me in the future. If it's not this deal, I want to be in the position for the next one. As the apartment complex sits, my research says rents can be raised as leases come up by 50$ a unit. I think the real value add would come in spending 5-10k unit, which from market analysis would bring another 100-150 in rent. I would really like to do one and test the market for 700-800 a month. It's a 1/2 mile over the bridge to the beach, and it's stand a lone. The sign is a ugly brown sign of a fisherman holding a net. I think the value add could be a new modern sign, a modern color, and updated units. Having said that as I'm thinking through this it would probably take another 300k to do that and at $700 a month the monthly rental income would $22,400, and the total cost would be around 2 million.

Also, in my experience 5% is not enough for capital expenditures. Even if it is newly renovated, I need to be putting more away than 80$ a month for the HVAC unit that is going to go out in 9 years, the roof that has 12 more years, and the window that starts leaking. However, without the HELOC payment it looks good, and if you are building a relationship with this investor and may be able to pick up the others, it might a worth pulling the trigger.

@michael Blankenship 

 I live on the coast about 30 minutes from where the flooding starts. A lot of the businesses moved all merchandise out before the flooding and residence were prepared as well, because of the warning and predictions. Hurricane Floyd flooded NC a lot worse, and the communities and commerce bounced back. I would think that if anything it would create a short term buyers market--buy low (when the water is high) and sell high (when the water is gone), but I don't think property values will really dip because of the flood. Having said that, I wouldn't buy a property in a flood zone. If I can be boots on the ground, or answer any questions, shoot me a message. 

Hi Fellow BPers, 

I was looking for some feed back about valuing this 32 unit apartment complex. I feel comfortable analyzing SFH, but I want to learn more about multifamily. So is this a deal you would do, and if not, what would need to change for you to be a buyer. It is a stand alone complex in a B- neighborhood. It is currently 100% occupied (which lacks a "get them all rented" value-add) It has the same owner since the mid eighties and rents are lower than comps. He is renting them for $515 for the single bedrooms and $550 for the two bedroom apartments, which is 50-75$ below market from doing a market analysis of surrounding apartments. My hypothesis is that there could be a magic middle between new units a mile down the street that rent for 1050$ for a 900 sqft two bedroom, and the $550 two bedrooms in this complex with a little upgrading.

I had a meeting with the commercial loan officer, and he said that they typically only loan 65% LTV to newbies-to-apartment-complexes and that he would consider the owner carrying a note for 10% of the purchase price as debt, so I'm pretty much out, but would like to get your feedback. Also, the spreadsheet above uses a 30 amortization, but the lender said 20 years is standard, but the confusing thing is their website says 30yr and 40yr amortization is available. I didn't asked him to clarify before leaving. So where would you have to be to be a buyer.

Natasha Keck thanks for your experience.

I'd like to hear from buy and hold investors as to whether or not you've sold property to move your portfolio forward and looking back was it the right decision? I posted some details of where I am at with REI. My goal in the future is to invest in apartment complexes of 30 or more units. I currently own two single-family rentals, and live in a REO that I bought a year ago and have renovated. I keep going back and forth on selling a house to free up capital for another investment, two, or three. I hear stories about how investors always look back and wish they didn't sell any properties, but my DTI and lack of cash is bottle necking my efforts of keeping this training running. I can probably HELOC my primary residence in the spring, but the last time a tried my DTI was too high, so I'm doing the driving 2007 Yaris and foraging for food in the wilderness thing to pay down debt. I have 27k of debt in total besides mortgages: student loans, small car loan, Lowes Home Improvement, and few credit cards. After reading The Millionaire Real Estate Investor by Gary Keller (Which I put off for a while because the title seemed hokey), I've started keeping a net worth spread sheet, which got me thinking, "How can I best leverage my equity to grow."

House 1- Primary REO 112k of equity. In June, I will have lived in the house for two years, I could sell and not pay taxes.

House 2- Single-family rental. Mortgage is 98k, appraised at 144k a month ago. Rents for 900. Lived in it 2 of the last 5 years, so wouldn't have to pay capital gains.

House 3-Single family rental. 5 years left on mortgage. Owe 25k. Rents for 700. Have had a long-term tenant and need to raise the rent to market 800. I haven't had it appraised recently but comps sell for 95-125k.

So what strategy would you use to move forward from here?

Thank you for your feedback in advance,

Yup, as stated above rental income counts as income and an actually improve your debt to income ratio after you've been a landlord for a year or two. After that, you can bring in a lease on your newest purchase and that new income SHOULD be considered by lenders. 

@Matt Turner I've had really, really good experience renting to military families and bad experiences with cats. Having said that it doesn't hurt to keep marketing and finding a third choice. Also, get a non refundable deposit to hold your house if you go that route, or better yet get full deposit and first months rent and sign a lease. My experience is that the more energy I put into screening and finding the tenant in the beginning it cuts down on my headaches throughout the year!

Joe Villeneuve can you share what expenses are you using to calculate cash flow?